CMA consults on further reform to UK merger procedure guidelines

On 20 June 2025, the Competition and Markets Authority (CMA) launched a public consultation on changes to its merger guidance on jurisdiction and procedure to implement the "4Ps" strategic framework (of pace, predictability, proportionality and process) (the Draft Guidelines), which seeks to ensure that merger control supports the UK Government's economic growth objective. The consultation closes on 1 August 2025.

What you need to know

• Guidance on the material influence and share of supply jurisdictional tests which the CMA frequently applies in merger control investigations has been updated to clarify the CMA's approach. The UK Government separately announced in March 2025 that it plans to launch a consultation "in the coming months" proposing legislative changes to these tests.
• The CMA is proposing to adopt a "wait and see" approach to global transactions, noting it is less likely to open investigations where markets are global and the transaction is subject to review by other regulators, or where remedies agreed in other proceedings would be likely to address any competition concerns in the UK.
• The CMA also proposes to update the questions in its merger notice template to align the template with the proposed guidelines and 4Ps.

So why now?

On 15 May 2025, the Government published its updated strategic steer to the CMA, which sets out the Government's overarching aim for economic growth and the role of the CMA in delivering that aim. Among other changes, the steer requires the CMA to review its procedural guidance to increase accessibility, transparency and provide "proactive, transparent, timely, predictable and responsive engagement with businesses".

The CMA is increasingly focusing on its "4Ps" framework, which was first announced by the CMA's Chief Executive Officer in November 2024 and formally adopted into the CMA's new Mergers Charter in March 2025, to ensure that all areas of its work adhere to the principles of "pace", "predictability", "proportionality" and "process" (referred to as "the 4Ps").

The Draft Guidelines seek to incorporate the UK Government's overarching economic objective and the 4Ps into the CMA's merger control review process.

Proposed updates to the CMA's pre-notification procedure and phase 1 merger review process

The Draft Guidelines set out the CMA's commitment to ensure that the pre-notification stage of merger investigations (i.e. the period between the CMA issuing a process letter and the commencement of the statutory phase 1 review) will "typically" be limited to 40 working days (compared to the current average of 65 working days). This commitment is intended to support the delivery of the first of the 4Ps: pace.

In order to ensure that the 40 working day commitment is achieved, the CMA has proposed new requirements for merging parties to adhere to before it will commence the formal pre-notification stage. The CMA must now be satisfied that the merging parties' draft Merger Notice (DMN), or response to an enquiry letter, "provides the necessary information for the CMA to carry out the initial stages of pre-notification, such as prioritising the most relevant theories of harm and engaging with relevant third-parties". In practical terms, this includes identifying all horizontal overlaps and vertical links between the merging parties' businesses in the DMN, and providing all supporting documentation requested in the Merger Notice template (including, internal documents), relevant third-party contact details and consent for the CMA to announce the commencement of the pre-notification stage on its website. Only once the CMA is satisfied that it has received all of this requested information will it trigger the formal pre-notification stage.

Another target being proposed to improve upon pace is the CMA's intention (as set out in the Draft Guidelines) to clear "straightforward" phase 1 cases within 25 working days of the 40 working day statutory deadline. This change would represent a significant improvement on the current average of 35 working days for phase 1 cases and bring the CMA's phase 1 review timeframe in line with that of the European Commission. The shorter clearance decisions that are typically seen in relation to simple European Commission phase 1 clearances are also likely to become a familiar sight in the UK, as the CMA has confirmed that to meet this new deadline, its decisions will be in a more summarised form.

Earlier engagement with the merging parties

The Draft Guidelines state that the CMA will invite the merging parties to hold a teach-in session during the pre-notification stage so that the case team can better understand the industry and the merging parties' businesses. The CMA anticipates that this teach-in will be led by the "key commercial and operational staff" from the merging parties' businesses (as opposed to their external advisors) and will streamline the early stages of the merger review process by giving the case team an opportunity to ask pertinent questions and focus on key issues. A senior member of the CMA's case team will also attend these teach-ins and offer the merging parties a brief outline of the envisaged process.

In addition to early engagement with the merging parties at a teach-in session, the CMA also proposes to hold informal update calls (the first typically taking place 20 working days into pre-notification, and another shortly before commencing the formal notification). The CMA anticipates that these forms of early engagement will have a positive impact on the overall process.

The CMA's jurisdictional tests

Amendments to clarify the scope of the "material influence" test

Under the UK merger control regime, the CMA has jurisdiction to investigate mergers that constitute a "relevant merger situation", which arises when two or more enterprises cease to be distinct. Enterprises cease to be distinct where they are "brought under common control or ownership" in at least one of following circumstances: (i) legal (de jure) control, (ii) de facto control or (iii) material influence.

Building upon its recent decisional practice, the CMA has proposed amendments to the Draft Guidelines that clarify its approach to identifying material influence. When undertaking this assessment, the CMA will consider the extent to which the acquirer is able to influence the commercial strategy of the target based on:

• the acquirer's ability to block or approve commercial decisions by way of special resolutions;
• the acquirer's ability to appoint members to the target's board; and
• other agreements between the merging parties that puts the target in a position of dependency when making commercial decisions.

It is important to note that a finding of material influence does not necessarily require that the acquirer is able to influence the day-to-day operation of the target, nor is there a requirement that the acquirer has ever actually exercised material influence over the target. The potential to exercise material influence in relation to the target, and in particular its commercial strategy, is sufficient.

The Draft Guidelines confirm that an acquirer's shareholding will typically have a direct bearing on its ability to influence the target entity, and that a shareholding exceeding 25% will generally confer material influence as it enables an acquirer to block special resolutions. In contrast, minority shareholdings below 25% are unlikely to result in the acquisition of material influence "in the absence of other factors", such as the presence of financial agreements, commercial agreements, or agreements to provide consultancy services to the target entity that enable the acquirer to materially influence the target's commercial policy. The Draft Guidelines further state that it is only in exceptional circumstances and in the presence of "significant other factors" that the acquisition of a minority shareholding of less than 15% will confer material influence on the acquirer (in contrast to the current guidelines, which refer only to "other factors"). This change reflects the very small number of previous cases where the CMA (or its predecessors) have found minority shareholdings of less than 15% to confer material influence.

The CMA's consultation document states that the amendments it has made to the Draft Guidelines in relation to the material influence test will ensure a greater level of predictability.

Amendments to reflect recent developments in relation to the "share of supply" test

The Draft Guidelines also propose several changes in relation to the share of supply test in an attempt to increase its predictability. The share of supply test is one of the thresholds (alongside the turnover test and hybrid test) that determines whether a relevant merger situation qualifies for investigation.

The share of supply test is met where, as a result of the merger, a share of 25% or more in the supply or purchase of goods or services of a particular description in the UK (or in a substantial part of the UK) is created or enhanced. As a result of amendments introduced by the Digital Markets, Competition and Consumers Act, this is subject to the requirement that at least one of the parties has a turnover in the UK that exceeds £10 million (see our June 2024 update). The Draft Guidelines propose two important amendments to the CMA's guidance in relation to the share of supply test:

• The first change concerns the CMA's ability to apply the share of supply test in relation to multiple factors including value, cost, price, quantity, capacity and number of workers employed (these criteria are explicitly referred to in the Enterprise Act 2002). The Draft Guidelines confirm that the CMA will limit its consideration to these factors when applying the share of supply test (although this continues to leave the CMA with significant flexibility to establish jurisdiction).
• The second amendment confirms that in determining the description of goods and services under the share of supply test, the CMA will consider those goods and services which "are relevant to any potential competition concerns arising from the merger". In this connection, the CMA refers to paragraph 144 of the Competition Appeal Tribunal's judgment in Sabre Corporation v Competition and Markets Authority [2021] CAT 11, which found that the purpose of the share of supply test is "to identify a merger which does not meet the turnover test, but in respect of which there is a sufficient prospect of a competition concern arising from an overlap in relevant commercial activity as to render it worthy of investigation" (see our June 2021 update).

The CMA's new "wait and see" approach to global mergers

The Draft Guidelines respond to recent criticism of the CMA for intervening in mergers which appear to have limited impact on the UK. The Draft Guidelines indicate that the CMA is more likely to prioritise only those mergers that have a UK-specific market impact to ensure that it meets the objective of proportionality.

In respect of exclusively global (or broader than national) markets, the CMA intends to adopt a "wait and see" approach. In summary, the Draft Guidelines state that where investigations are being undertaken by competition authorities in other jurisdictions, the CMA will be less likely to undertake its own investigation in cases where remedies that are agreed or imposed would also be likely to address any competition concerns in the UK. However, there is no guidance on how this will work in practice and it remains to be seen what practical implications a "wait and see" approach will have .

Changes to the CMA's Merger Notice template

The Draft Guidelines place an emphasis on the merging parties disclosing information and internal documents earlier in the process and prior to the formal pre-notification stage. This is also reflected in the proposed amendments to the Merger Notice template. A number of the questions have been amended including:

• Question 8 of the Merger Notice (which requests internal documentation directly relating to the merger) now includes a request for the provision of the parties' documents relating to the decision making process, the anticipated timeline, and key internal contacts involved in the proposed merger. This request is applicable from the initial conception of the merger to the point at which final agreement is reached. At present, the case team often requests information on how the merger was agreed and approved during the pre-notification stage, whereas the Draft Guidelines envisage that this information will be submitted by the merging parties in the DMN (i.e. prior to pre-notification discussions).
• Secondly, Question 9(b) requests copies of all internal documents that set out competitive conditions (i.e. market conditions, the parties' market shares, other competitors and relevant business plans). Previously this requirement only applied to horizontal overlaps between the merging parties, whereas the proposed amendments now also include vertical overlaps. Additionally, the Draft Guidelines reduce the de minimis threshold for when parties are not required to submit documents in response to this question, from a share of supply not exceeding 15%, to 10%. Broadening the request for internal documents does appear to be at odds with the Draft Guidance's suggestion that in future investigations, parties "will be required to produce a reduced volume of internal documents". Although documents relating to vertically affected markets would generally have been requested during the CMA's review, this would typically have focused on a more limited subset of vertical links identified in light of the preliminary investigation.
• Question 15 has been greatly expanded from a standard request for the parties' bidding data that showed any historic bids in the relevant overlapping markets. The draft amendments to question 15 seek to (i) understand the significance of potential opportunities compared with their revenue, (ii) the frequency at which these opportunities arise, and (iii) the variation in value between potential opportunities. The CMA is expanding question 15 in an attempt to narrow down the appropriate scope of its analysis as to what is relevant for the investigation.

Comment

It remains to be seen how the CMA's Draft Guidelines will evolve following stakeholder feedback, but it should be noted that a number of the amendments, such as the changes to the material influence and share of supply tests, codify the CMA's recent decisional practice. The most significant changes brought about by the changes to the CMA's Draft Guidelines are likely to include the measures aimed at increasing the pace of phase 1 cases (including changes to the pre-notification process) and the CMA's policy stance with respect to global mergers. From a consultation on refining the UK subsidy control regime (see our April 2025 update) to changing its approach to merger remedies (see our March 2025 update), the amendments to the CMA's procedural guidelines are just the latest in a growing list of changes to its regulatory environment that the CMA has been exploring this year in applying the 4Ps throughout its case work.

Want to know more?

• UK merger control, 06 May 2022, https://www.ashurst.com/en/insights/quickguide-uk-merger-control/
• Consultation outcome: refining the UK subsidy control regime, 17 April 2025, https://www.ashurst.com/en/insights/consultation-outcome-refining-the-uk-subsidy-control-regime/
• CMA reconsiders approach to merger remedies and publishes Mergers Charter, 17 March 2025, https://www.ashurst.com/en/insights/cma-reconsiders-approach-to-merger-remedies-and-publishes-mergers-charter/

Authors: Finlay Sadler-Wilson, Junior Associate